Regardless of whether or not the U.S. stock market has another stellar year in 2014, we believe you should always have some exposure to U.S. equities. And if you’re an ETF investor, here’s an ETF that covers all the bases in the U.S. market.

Last issue we pointed out that many Wall Street pros believe that U.S. stocks will rise 10 per cent this year. That may be a bit optimistic in our view, especially since the S&P 500, America’s large-cap index, enjoyed a total return of just over 32 per cent last year.

Nonetheless, as we said in the same issue, we think you should continue to have exposure to the U.S. stock market. That’s because by doing so, you can benefit from owning a stake in some of the world’s largest multinational companies such as Apple Inc., Exxon Mobil and Google. Businesses like these are among your best bets for profiting from global economic growth.

Yet U.S. smaller-cap stocks also hold great appeal. When economic recoveries start to gain momentum, small-cap stocks often lead the way. And that proved to be the case in 2013, when the Russell 2000, an index of smaller-cap issues, posted a total return of nearly 39 per cent.

Invest in both small- and large-caps

There’s a good case to made, then, for investing in both large- and small-caps in the U.S. And Canadian exchange-traded fund investors looking for both types of exposure in one offering should consider the VANGUARD U.S. TOTAL MARKET INDEX ETFs.

Vanguard offers two ETFs that seek to track the performance of a broad U.S. equity index that measures the investment returns of primarily large-cap U.S. stocks. Currently that index is the Center for Research in Security Prices’ U.S. Total Market Index.

The main difference between the two ETFs is that one hedges to the Canadian dollar and the other does not. The former trades under the ticker symbol VUS and the latter trades under the symbol VUN. Both trade on the Toronto Stock Exchange.

We prefer the unhedged version for the moment. That’s because we feel the U.S. dollar will continue to be strong in the near term, so investors in the unhedged version stand to gain from this strength. Besides, currency fluctuations tend to cancel each other out over the long term, making hedging less attractive, particularly if you have to pay higher fees for the hedging feature.

At any rate, regardless of which ETF you choose, both give you broad exposure to the U.S. market. About 38 per cent of their weighting is in large-cap companies, 27 per cent is in medium/large-caps, 17 per cent in medium-caps, 10 per cent in small/medium-caps, and eight per cent in small-caps.

Recommendation:Vanguard U.S. Total Market Index ETF (TSX-VUN) is a buy for ETF investors seeking broad exposure to the U.S. market with one ETF.